Yes, I consider our household to be comfortably in the top decile of wealth in the UK. Yet looking at the methodology of the referenced report I am confident our household would be counted by the report as being in the bottom decile by its measure of "equivalised net household income, before housing costs". We are not the only ones.

To be fair the report highlights this shortcoming right at the start, but shame on the Daily Mail for failing to point this out.

I conclude that the report is either completely unfit for purpose, or it is saying that my family, one of the top 10% wealthiest households in the UK, receives £4 in public spending for every £1 in tax we pay.

Which would you say is the right interpretation?

GSWho declares practically no earned income and pays practically no direct tax on very substantial ISA and other tax-free investments.

Yes, I consider our household to be comfortably in the top decile of wealth in the UK. Yet looking at the methodology of the referenced report I am confident our household would be counted by the report as being in the bottom decile by its measure of "equivalised net household income, before housing costs". We are not the only ones.

To be fair the report highlights this shortcoming right at the start, but shame on the Daily Mail for failing to point this out.

I conclude that the report is either completely unfit for purpose, or it is saying that my family, one of the top 10% wealthiest households in the UK, receives £4 in public spending for every £1 in tax we pay.

Which would you say is the right interpretation?

GSWho declares practically no earned income and pays practically no direct tax on very substantial ISA and other tax-free investments.

There does not appear to be a referenced report in this article, and it is not in the Daily Mail. I expect that the numbers given are averages for the deciles concerned, and do not apply to any individual, unless they are very typical of the decile concerned. What the article does not tell us is the definitions of Income and Public Spending Received used in the tables. Perhaps some kind person can provide a link.

GoSeigen wrote:Yes, I consider our household to be comfortably in the top decile of wealth in the UK. Yet looking at the methodology of the referenced report I am confident our household would be counted by the report as being in the bottom decile by its measure of "equivalised net household income, before housing costs". We are not the only ones.

To be fair the report highlights this shortcoming right at the start, but shame on the Daily Mail for failing to point this out.

I conclude that the report is either completely unfit for purpose, or it is saying that my family, one of the top 10% wealthiest households in the UK, receives £4 in public spending for every £1 in tax we pay.

Which would you say is the right interpretation?

GS

Who declares practically no earned income and pays practically no direct tax on very substantial ISA and other tax-free investments.

There does not appear to be a referenced report in this article, and it is not in the Daily Mail.

I expect that the numbers given are averages for the deciles concerned, and do not apply to any individual, unless they are very typical of the decile concerned.

What the article does not tell us is the definitions of Income and Public Spending Received used in the tables.

Perhaps some kind person can provide a link.

That'll be the 'Impact on households : distributional analysis to accompany Budget 2018' document, linked below and with the following section on Page 3 that is touched on by GoSeigen -

Box 1.A: Measuring household incomes.

The analysis in this document uses household income as the measure of a household’s standard of living. While this is the standard measure, some households experience periods of low income temporarily, or finance their standard of living through utilising wealth rather than through income. Therefore, income may not always best represent their general standard of living.

johnhemming wrote:They should really look at expenditure deciles rather than income deciles.

I'm not clear why expenditure deciles should be much different from income deciles. The UK is not a country where massive fortunes are being built up over time, and there are no pockets in a shroud. Earned money is always ultimately spent.

I do take exception to the comment in the This is Money article that:Despite suggestions from some quarters – and the high profile very high earners who skew our perception - it highlights the UK economy is getting fairer.when what they mean is that the post tax income is getting more equal. But not fairer if you think that effort should be rewarded.

As usual, there are unexpected consequences to Govt actions. The increased income of the lower percentiles is due to the spread of the national living wage. Yet it is that national living wage which is killing the economics of town centre shops and restaurants.

johnhemming wrote:They should really look at expenditure deciles rather than income deciles.

That is addressed on page 3 the report:

"Alternative approaches have used household expenditure to better approximate a household’s standard of living. Approximately 20% of those in the bottom income decile are in the top half of the distribution when households are ranked by their total expenditure. Due to limitations in the data, an expenditure-based approach is not used here, but the impacts of government decisions on low income households should be considered in the context of these methodological choices."

Public Spending Received just includes money directly received, and does not include things like expenditure on defence, which I would have thought could be divided equally amongst the population.

Nimrod103 wrote:I do take exception to the comment in the This is Money article that:Despite suggestions from some quarters – and the high profile very high earners who skew our perception - it highlights the UK economy is getting fairer.when what they mean is that the post tax income is getting more equal. But not fairer if you think that effort should be rewarded.

Good luck, particularly the accident of birth, is more important in determining outcomes than effort. Is it fair that good luck should be rewarded?

I would say that unequal outcomes are unfair, but life is unfair. Attempts to ensure equal outcomes do not have a happy history. In reality, even equality of opportunity is unattainable in the real world. Equality in the sense that the race is run according to the rules is the best for which we can hope. Nonetheless, we still have a responsibility to soften the blow for life's losers.

Nimrod103 wrote:As usual, there are unexpected consequences to Govt actions. The increased income of the lower percentiles is due to the spread of the national living wage. Yet it is that national living wage which is killing the economics of town centre shops and restaurants.

Increased income for the lower percentiles is also the consequence of tax credits. The minimum wage has minimal impact on employment levels. Town centre shops are closing because of the Internet and high business rates. In my own city, they are are closing because bigger and flashier retail space has recently been built. Nobody seems to want the smaller and older retail spaces anymore.

Nimrod103 wrote:As usual, there are unexpected consequences to Govt actions. The increased income of the lower percentiles is due to the spread of the national living wage. Yet it is that national living wage which is killing the economics of town centre shops and restaurants.

Increased income for the lower percentiles is also the consequence of tax credits. The minimum wage has minimal impact on employment levels. Town centre shops are closing because of the Internet and high business rates. In my own city, they are are closing because bigger and flashier retail space has recently been built. Nobody seems to want the smaller and older retail spaces anymore.

Not just my view (https://www.telegraph.co.uk/business/20 ... retailers/).I have read that 200 shopping centres across the UK are in severe difficulty. Obviously the internet is playing a part, but you can't raise wages in labour intensive businesses (and which have difficulty raising productivity), without it having some effect.

Nimrod103 wrote:Not just my view (https://www.telegraph.co.uk/business/20 ... retailers/).I have read that 200 shopping centres across the UK are in severe difficulty. Obviously the internet is playing a part, but you can't raise wages in labour intensive businesses (and which have difficulty raising productivity), without it having some effect.

There are lots of boarded up shops, but why is that a "severe difficulty"? I am still getting all the stuff I want to buy. If some of the weaker retailers go out of business, that is not a problem. There will still be plenty left. That increases efficiency. Nonetheless, the increase in the minimum wage may still increase prices a little. That is not a problem either.

Nimrod103 wrote:Not just my view (https://www.telegraph.co.uk/business/20 ... retailers/).I have read that 200 shopping centres across the UK are in severe difficulty. Obviously the internet is playing a part, but you can't raise wages in labour intensive businesses (and which have difficulty raising productivity), without it having some effect.

There are lots of boarded up shops, but why is that a "severe difficulty"? I am still getting all the stuff I want to buy. If some of the weaker retailers go out of business, that is not a problem. There will still be plenty left. That increases efficiency. Nonetheless, the increase in the minimum wage may still increase prices a little. That is not a problem either.

Severe financial difficulty that is (https://www.bbc.co.uk/news/uk-england-45707529). A lot of councils (as well as pension funds, British Land etc) are rather too dependent on income from shops, and some councils (mine included) are taking big financial gambles in building more themselves. Time will tell whether this is a mistake which council tax payers will end up by bearing the cost of.Also restaurants. AIUI the various chains of eateries which have closed or are under threat, are in that state due to the rise in the minimum wage. Apart from the odd pub lunch, I cannot remember the last time I ate out in the UK.For now the displaced workers are being absorbed in the rest of the economy, but that cannot continue for ever.

I did say ultimately. We are talking UK wide statistics here. Does a delay in spending by giving the cash to student offspring, or keeping it in the bank for a year or two really affect the interpretation of the data?

I did say ultimately. We are talking UK wide statistics here. Does a delay in spending by giving the cash to student offspring, or keeping it in the bank for a year or two really affect the interpretation of the data?

Nimrod103 wrote:Severe financial difficulty that is (https://www.bbc.co.uk/news/uk-england-45707529). A lot of councils (as well as pension funds, British Land etc) are rather too dependent on income from shops, and some councils (mine included) are taking big financial gambles in building more themselves. Time will tell whether this is a mistake which council tax payers will end up by bearing the cost of.

Also restaurants. AIUI the various chains of eateries which have closed or are under threat, are in that state due to the rise in the minimum wage. Apart from the odd pub lunch, I cannot remember the last time I ate out in the UK.For now the displaced workers are being absorbed in the rest of the economy, but that cannot continue for ever.

That is the risk you take when you invest in businesses. Do not do it if you cannot stand the loss.

Restaurants appear to be opening all over the place where I live, and I cannot move for the fast food ads pushed through my door.

Nimrod103 wrote:Severe financial difficulty that is (https://www.bbc.co.uk/news/uk-england-45707529). A lot of councils (as well as pension funds, British Land etc) are rather too dependent on income from shops, and some councils (mine included) are taking big financial gambles in building more themselves. Time will tell whether this is a mistake which council tax payers will end up by bearing the cost of.

Also restaurants. AIUI the various chains of eateries which have closed or are under threat, are in that state due to the rise in the minimum wage. Apart from the odd pub lunch, I cannot remember the last time I ate out in the UK.For now the displaced workers are being absorbed in the rest of the economy, but that cannot continue for ever.

That is the risk you take when you invest in businesses. Do not do it if you cannot stand the loss.

Restaurants appear to be opening all over the place where I live, and I cannot move for the fast food ads pushed through my door.

Nimrod103 wrote:Severe financial difficulty that is (https://www.bbc.co.uk/news/uk-england-45707529). A lot of councils (as well as pension funds, British Land etc) are rather too dependent on income from shops, and some councils (mine included) are taking big financial gambles in building more themselves. Time will tell whether this is a mistake which council tax payers will end up by bearing the cost of.

Also restaurants. AIUI the various chains of eateries which have closed or are under threat, are in that state due to the rise in the minimum wage. Apart from the odd pub lunch, I cannot remember the last time I ate out in the UK.For now the displaced workers are being absorbed in the rest of the economy, but that cannot continue for ever.

That is the risk you take when you invest in businesses. Do not do it if you cannot stand the loss.

Restaurants appear to be opening all over the place where I live, and I cannot move for the fast food ads pushed through my door.

"The casual dining trading environment in the UK is challenging due to a combination of factors,including a deterioration in the consumer environment. The Group’s core brand, Prezzo, hascompetition from other brand names such Pizza Express, Franco Manca, ASK Italian, Zizzi andBella Italia. In addition, Prezzo seeks to keep pace with other competitors’ discounting methodsto avoid declining consumer footfall. Prezzo’s revenue dipped 3.3 % (three point three per cent.)year-on-year for the twelve months to December 2017. Like-for like sales have dropped in thisperiod by 8.1 % (eight point one per cent.) year-on-year. These factors have had a significantadverse impact on Prezzo’s trading performance and financial position.2.3 A significant fixed cost of Prezzo’s business is the rent payable to Landlords under the leasesof premises from which it operates in the UK. In addition, there has been significant increasesin a number of other costs incurred by the business. Increases have been experienced in thefollowing categories: employees, input costs and business rates. The Directors have concluded,for a number of reasons, that Prezzo’s current business model and associated cost structure isno longer viable in a number of cases, particularly locations with low revenue levels. Rentalcosts associated with underperforming restaurants are unsustainable. Many restaurants are lossmaking at an operating level and sales per square foot are significantly below other casualdining chains. The Directors have noted that consumer preferences favour restaurants withstrong brand identification and an efficient food and restaurant layout. "

ie, while rising employee costs are one factor, they are by no means the only factor, and the implication of the statement is that rents is themost significant factor.

Given that some of Prezzo's restaurants (pre CVA) were so poorly performing that they could not hope to make a profit even if the rental cost of the premises was reduced to zero, it is easy to suggest that they were overly growth oriented and took some very poor investment decisions as a result.